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Recently I did my year-end-calculation for 2021 for my tax-advisor, and discovered some interesting, but also quite shocking things.
What really made me think a bit different about matters (but unfortunately also produced some type of foolish-pride feeling) was the $-Amount I have moved in the market.
For Futures it was: $ 6,224,150.00 . That's insane looking on how little I actually understand what is really going on in the market.
Stocks were: ~$ 63,333.15
Also interesting is (I've calculated that in €, but it's anyways almost the same in USD for that matter):
Costs for software: € 800.43
Costs for education: € 818.15
My net results for Futures was actually +€ 41.86, but if you subtract the commissions paid it's a loss of -€ 314.06
Overall looking at it as a business, (so also including my insurance) I made a loss of about € 5,000 in the year of 2021.
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Other than that, I'm still planning to start again in 2023, but I will for sure never return to that insanity of 2021.
I'm looking a bit into spreads currenty. Maybe I'll dig deeper into calendar-spreads in Wheat. I definitely want to have longer term positions, doing more research and less actual trading.
If possible with my limited capital, I think about 2-3 months holding time would be appropriate.
Life was pretty stressful this year, but I have to admit I miss the "market-life" a lot and really look forward to come back in a more orderly fashion!
And btw Happy Thanksgiving to all American fellas here!
"Thou hast been faithful over a few things, I will make thee ruler over many things"
First trade for 2023.
After watching spreads a bit and a "relapse" to dig again into the P&F method I once tried, I then decided to stick pretty much to my most recent trading-plan and continue where I've stopped in mid-2022.
Plan is to trade my 3 markets according to plan for the entire year and look what happens.
Trade 01/2023
2023-01-05
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Then also opened a position in Corn on the same day.
Trade 02/ 2023 Entry
(r/r is actually 2.7)
My estimation were 10-12 trades for entire 2023. Now it's mid January and I'm already in the 2nd trade.
It's going to be interesting how this will work out over the year, but I guess there will be probably a 2 month or so period without a trade at some point.
So far everything under control.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
I thought about the topic of commission-cost a bit in the recent days.
A full seat on the Board of Trade costs $ 305,000 at the moment, for the Mercantile Exchange even $ 494,500.
I havent's digged into what is included and what the specifics are, but as far as I know, members don't pay transaction cost, since they deal directly with the exchange, without the evil intermediary called broker.
Trying to dismantle who makes money at which point in this entire chain, I come more and more to the conclusion that the shorter the horizon you look at and base your trades at, the more important it becomes to look at your commission cost.
If I think back to my tick-chart-trading in 2021, taking also software cost (which is a factor which also becomes more important, the shorter the horizon one is trading in) into account and then of course commission, I dare to say that it just wouldn't have been possible to make money that way.
That probably all sounds a bit like a truism, but I argue that it's not easy to really think about those matters. (Probably because of the missing up and down smashing candles and flashing P&L displays).
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Bought Soybeans.
I think my estimation of 10-12 Trades is probably a bit too low. I've likely overlooked losing patterns that were "absorbed".
Maybe it's more like 15 trades.
Currently Corn could build up the next trade already.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
In April I'll start an extension of my current game-plan.
After thinking through it, it occurred to me that trading the simulated Grant Liberty Fund makes not very good sense from a practical real-life standpoint.
But the problem with only my three major grains is, that they produce too little signals. That kinda leads to a bit too much detachment from the market, and I'm often in the situation of asking myself if I'm gunshy, or if I'm reasonable in not trying to force trades.
The next three markets which could fit in from the risk-management side are Canola, Sugar and Live-Cattle. The plan ist to trade those three markets in an simulated account for the rest of 2023 and blend the results with my real trading in the grains and look how that works.
The benchmark for these 3 markets is necessarily a $ 20,000 account, but that's more of an anchor to measure the results.
I started to also look on the margins and try to go still farther in the mindset of being a merchant with the goal of staying liquid enough to continue my business. I hope that will help to overcome the disadvantage of being undercapitalized. (Even though being undercapitalized and having to deal with that is, when looking on the long run probably an advantage).
Phasing In Plan
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Some thoughts on the trade identification with Chart-Patterns ala Schabacker
Finally in Soybeans there's a next possibility for a trade.
Interesting is, that there are a few ways to see the situation and different conclusions to come at concerning if/when to enter and where to choose the profit target.
View #1
I watched the development now for quite a while basically as a Rectangle and also with the possibility of going long if it had broken out on the top.
The problem that occurs now is, how strictly to draw the boundary lines?! In the end it's a matter of taste, but the way I see the Rectangle, it's still not confirmed because the close yesterday wasn't really below the lower boundary.
View #2
Then you could also see it as a Complex-Pattern with 2 left shoulders or even as a normal Head & Shoulders. Since the neckline is slanting slightly upwards, the close was visibly below it. So it's confirmed according to my set of rules.
View #3
The last option is a symmetrical, but probably more of a descending Triangle. Since the entry is the same as the H&S, it's also confirmed but the difference is, it suggests a different profit-target.
And to make it still more confusing, I calculate only a 1.98 r/r which is "not enough to trade it" according to my rules.
So anyways, this trade is a perfect example of how confusing things can get and that you can come to numerous different conclusions and in the end it's just in your own head.
I decided it to be a Triangle and still trade it, because the profit target is moving anyways and after one or two days, It will exceed the 2-mark.
And in all this I'm almost forgetting that "trade identification is the least important part of it all!"
"Thou hast been faithful over a few things, I will make thee ruler over many things"
Also started a new book on the weekend "Cargill - Trading the World's Grain".
That's basically a business-biography about the company Cargill, which ist one of the largest companies in the grain-sector.
It was found in the 1860's in the US and still exists today and is still privately owned.
Looking through the table of contents, there's also quite a bit about the futures-part of the business and Cargill's dealings with the CBOT in it. So it will hopefully help in building the next part of the bridge between the artificial up and down of the bars, and the "real-life" part of the business.
Striking until now is, that quite a lot of the grain elevators burned down back in the days. At times the dry grain ignited itself and the elevators being built of wood then bursted into flames.
You could insure your elevator, but at times Will Cargill didn't even do that. Seems that losses are a part of the business.
"Thou hast been faithful over a few things, I will make thee ruler over many things"
